If aggregate planned expenditure is less than real GDP, in the short run
A) real GDP will decrease.
B) exports change to restore equilibrium.
C) aggregate planned expenditure will increase.
D) the price level will fall.

Question

Quizplus · Accepted Answer

If aggregate planned expenditure is less than real GDP, it means that there is a deficiency in demand which will result in firms reducing production and decreasing real GDP to attain equilibrium. In other words, in the short run, real GDP will decrease.

If Aggregate Planned Expenditure Is Less Than Real GDP, in the Short